Busted! SGI releases top five insurance fraud schemes

Narrator: In the insurance industry, fraudulent claims cost insurance companies millions of dollars per year. Within SGI, the dedicated men and women who investigate cases of suspected insurance fraud are members of an elite squad known as the Special Investigation Unit.

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The science doesn’t lie. A simple DNA sample off an airbag prevented a potential fraudster from scamming SGI out of $8,000 following a collision. And that’s just a drop in the bucket for SGI’s Special Investigation Unit (SIU), which saved SGI an estimated $5.6 million in 2018.

It’s the SIU’s responsibility to investigate suspicious insurance claims. This is important work that benefits SGI’s customers. When claim costs go up, more money has to be collected through insurance premiums to pay out on future claims. Discovering fraud means those claims aren’t paid out, and this helps keep insurance rates low. And since March is Fraud Prevention Month in Canada, what better time to talk fraud?

“SGI, like any insurance company, is focused on loss prevention and reduction – this includes crime and fraud prevention,” said Penny McCune, Executive Vice President and Chief Operating Officer of the Auto Fund. “To that end, the SIU is concerned with finding the truth and getting our customers the benefits they’re entitled to. Insurance fraud means higher rates for everyone.”

Insurance fraud costs the insurance industry and its customers millions of dollars each year.

Here are SGI’s picks for the Top 5 Frauds of 2018:

D-N-Airbags

It’s the perfect plan – you can’t be at the scene of an accident if you report your keys stolen. Even if the accident occurs mere blocks from your home (having severely damaged other parked vehicles).

But the SIU investigator on this case suspected the vehicle’s owner had in fact been behind the wheel at the time of the accident.

SGI’s SIU obtained a DNA sample from the vehicle’s deployed airbag – and it was a match to the vehicle’s owner. The probability that a random individual would share the same DNA profile is about 1 in 40 quadrillion – that’s with 12 zeros!

The would-be fraudster was betrayed by DNA! The claim was denied and the would-be fraudster was subsequently held responsible for paying back the $15,000 in damages that SGI has initially paid out to cover his vehicle and the others that had been damaged.

Cooking with gas

Picture this: you go out to start your truck on a cold day. You hurry back inside, waiting for your truck to get nice and toasty. You come back out, open the truck door, and you’re greeted with more than toasty – you find a blazing fire!

That’s the story one fraudster cooked up when reporting a claim to SGI, but it was something SIU had a hard time swallowing. Something didn’t smell right.

During the SIU’s investigation, they found evidence that multiple fires had been purposely set in the vehicle. Gas-soaked fabric was also found – and so was surveillance video from a building nearby. The video shows someone approaching the truck and moving about, opening different doors and then returning indoors. Seconds later, the video shows snow melting off the truck’s roof and the individual shown earlier returns to the scene.

Although the firestarter can’t be identified from the video, his or her actions mirror the actions described to SGI by the truck owner – pretty compelling evidence to lay charges!

Replacement costs for the truck were about $28,000 – money the investigation saved SGI and its customers. The claim was denied, and the fraudster was charged with arson for fraudulent purpose under the Criminal Code.

Caught on camera!

A vehicle was responsible for a hit and run collision, but the owner claimed she was out of town at the time and that her vehicle had been stolen.

However, both an eyewitness and surveillance video place her as a passenger in her vehicle at the scene of the collision – which she ultimately admitted was the case when interviewed by SIU. She also confessed that her unlicensed friend had been behind the wheel at the time.

SGI denied the claim, which resulted in $60,000 in savings – money that SGI is recovering from the individual responsible.

Commercial break: Worried you might not be covered? Insurance is there for when people make mistakes – including in an at-fault collision. Be honest and upfront when making your claim – there are fewer reasons than you would think for not being covered. Making a false statement risks having your claim denied altogether. Now back to our regular programming (*dun dun*)

Total burnout

This next file involves another vehicle that went up in flames. This time, the customer claimed the vehicle had been stolen.

A witness to the incident described an argument occurring prior to the fire and had video that showed multiple individuals leaving the scene where the vehicle had been set ablaze. When the witness caught up with one of the individuals walking away from the scene, the individual blurted out “let it burn!”

The SIU was brought in to determine whether the customer or a friend or family member had possibly been involved. Aided by the video evidence, they learned there was no theft after all.

And here’s why letting it burn wasn’t such a hot idea: The insurance claim was denied for providing a false statement to SGI, and the individual was charged with mischief by arson for burning their own vehicle. Total savings: $4,400 for the vehicle, which was a total loss.

Doggone it!

This is the insurance fraud version of “the dog ate my homework.”

A customer claimed to have swerved into a slough, attempting to avoid a dog. The vehicle was completely submerged, and the claim was settled.

A little while later, SGI received a tip that the claim was fraudulent. In fact, video existed that showed the customer purposely driving into the slough – meaning they are now required to pay back the $2,000 SGI had originally paid out.

Guess they were barking up the wrong tree with that fake story.

Honourable Mention: Deer SGI… I had an accident

Many Canadians know all too well the unfortunate outcome when a highway drive leads to a wildlife encounter.

One customer took advantage of the frequency of wildlife collisions by claiming she hit a deer while driving down a rural road. On the same night, about 100 km away, police were investigating a suspected hit and run involving her vehicle. Oh deer, something doesn’t add up.

When interviewed by SIU, the customer admitted her original statement had been deceitful and that she had loaned her vehicle to an unlicensed relative.

The insured was denied coverage and recovery was sought for the damages to the vehicle struck during the hit and run. SGI didn’t just save a buck or two -- the fake claim was worth more than $13,000.

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Learn from these would-be fraudsters: if you commit insurance fraud, it not only leads to denied coverage – and a hefty bill to fix those damages, or replace property – it could result in criminal charges. Committing insurance fraud can lead to higher premiums, your coverage being cancelled altogether and difficulty finding coverage with other companies.

Anyone with information about potential insurance fraud is encouraged to contact SGI's Special Investigation Unit at siu@sgi.sk.ca or 1-800-667-8015, ext. 6887. To report anonymously, call Saskatchewan Crime Stoppers at 1-800-222-8477